France confirms state aid for FTTH

Marcela Sirio/Ovum | February 02, 2010

Last month the French prime minister, Francois Fillon, restated the government’s plan to provide €2 billion of funding to accelerate FTTH deployment in the less densely populated areas of France.

The plan gives continuity to the promotion of the shared network investment option chosen by ARCEP, and also follows the market failure remediation approach recommended by the EC’s guidelines on state aid for broadband infrastructure deployment. Taken together with ARCEP’s formal market analysis, by mid-2010 operators should have the regulatory clarity they need to invest in both the dense and less densely populated areas of France.

The French prime minister’s statement is part of a €4.5 billion funding initiative dedicated to the digital economy. The allocation of €2 billion to high-speed broadband infrastructure was first announced at the end of 2009. Last week’s announcement provides some additional detail – a final decision on how the state aid will actually be delivered until mid-2010.

For now, the Delegation for Territorial Planning and Regional Action (DATAR) and the General Directorate for Competition, Industry and Services (DGCIS) have launched a public consultation on the national program for high-speed broadband in order to prepare the state aid framework for less densely populated areas (that is, areas with fewer than 250,000 inhabitants and where less than 20% of buildings contain 12 or more apartments).

Shared investment

According to the DATAR-DGCIS consultation document, shared deployment projects will be favored and the state aid is limited to funding a maximum 33% of the investment.

Applicants should submit proposals consisting of a five-year regional project, and be located in areas outside ARCEP’s definition of very densely populated areas. Proof of funding is also required. The project selection process will consider coverage, network deployment timetable and contribution to the degree of competition at the national level.

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